Fixed-Term Contract Mortgage
"I'm a Specialist Mortgage Advisor who can help your property dreams come true."
Ross McMillan
Blue Fish Mortgage Solutions
As a former estate agent of almost 15 years, I now use my vast experience, insider knowledge and access to dozens of lenders to help people like you:
- Secure the right mortgage for your circumstances.
- Successfully master the Scottish property buying process from start to finish.
- Achieve your property ambitions - however big or small
Get in touch for a no-obligation chat about how I might be able to help you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.
Table of Contents
For many people, getting a mortgage can be difficult enough as it is. But what if you are on a fixed-term contract? Does being on a temporary contract affect your mortgage options? Here we explore mortgages for fixed-term contractors and answer common questions such as eligibility criteria and available lenders. We will also look into how to apply if you have just started a new fixed-term contract, or if your current one only has a short time left. Read on to find out more about securing a fixed-term contract mortgage.
Can people on fixed-term contracts get mortgages?
Getting a mortgage while on a fixed-term contract can be complicated, as fixed-term contracts are seen as temporary and insecure by lenders, but with the right advice and help from an expert in this area, it certainly isn’t impossible.
As with most mortgage applications, the chances of securing a fixed-term contract mortgage depends on your individual circumstances as a whole but generally speaking, lenders look at how long you have been in the fixed-term contract, if you have a track record of similar roles and can provide proof of regular ongoing income, then chances are high that a lender will consider you for a mortgage.
Your overall financial circumstances will also be considered – if you can show from past history that you have been able to cope financially on other fixed-term contracts, this can certainly help your case too. Furthermore, if your fixed-term contract is tied to a work or profession related to an essential service – such as healthcare or education – many lenders may look upon this favourably when deciding whether to accept your application.
Why can getting a mortgage on a fixed-term contract be more difficult?
Those working on fixed-term contracts may face additional challenges when trying to obtain a mortgage.
This is because lenders considering a fixed-term contract mortgage want a set of consistent criteria to be met and fixed-term contracts can fluctuate in terms of their stability and income. In addition, fixed-term contracts may end before the mortgage is paid off completely.
Nevertheless, despite these limitations, it is possible for those with fixed-term contracts to get mortgages – so long as they meet the other requirements established by the lender in question.
Typically, having an excellent credit score, solid employment history, a steady income record and evidence of savings will all help those on fixed-term contracts qualify for the right mortgages.
Does being on a temporary contract affect your mortgage options?
When considering a fixed-term contract that is temporary in nature, it’s important to think about whether or not this will affect your options for applying for a mortgage.
While most lenders are happy to provide mortgages to people with fixed-term contracts, you may have more options and be eligible for better deals if you can prove that your fixed-term contract is a longer-term one. Some lenders do tend to view fixed-term contracts as high risk because they are impractical in terms of offering complete security and this can be exacerbated if the contract you have is considered short-term or temporary.
This means that if you are trying to apply for a mortgage while on a fixed-term contract, whether temporary or otherwise, you may have to jump through a few more hoops in order to convince lenders that your employment situation is more secure than they might think. Regardless there are still plenty of opportunities out there as long as you seek out the right expert advice and support from a specialist mortgage broker in this area.
Speak to an expert!
Contact me, Ross McMillan, the owner of Blue Fish Mortgage Solutions today for expert advice and guidance on your unique mortgage and property needs. I will work with you one-on-one to help you find the right solution for your specific needs. With my expertise and industry connections, you can rest assured that you are in good hands when it comes to securing the financing you need for your property.
What specific eligibility criteria will be assessed by lenders when considering a mortgage for a fixed-term contractor?
When lenders look at a fixed-term contractor for a mortgage, they will assess a few key factors in order to determine eligibility. Primarily, length of employment is taken into consideration–how long the contract length has been running, how long it has left and whether there is any chance for renewal.
Lengthier contracts tend to be seen as more sustainable for mortgage lending whilst the length of the current employment and of time spent with one company may also play a factor. The lender will generally need to ensure that the contractor has a demonstrated track record of continuous employment over an extended period of time in order to deem them eligible.
Lenders also typically look into how stable a contractor’s income has been and currently is during the length of the contract.
Another element often assessed by lenders when considering fixed-term contractors for mortgages is how much of a track record of contracting and/or similar work experience has been accrued and how has this demonstrated financial responsibility over an extended length of time.
With all these criteria being evaluated, lenders are then generally able to better decide on eligibility for any mortgage approval.
What mortgage lenders are available to those on a fixed-term contract?
Finding a mortgage lender when you’re on a fixed-term contract can be challenging, as vastly different and varied criteria around contracts can drastically affect eligibility and the amount of mortgage available from one lender to the next. It can be confusing as different lenders can evaluate exactly the same set of circumstances very differently
However, this doesn’t mean that it’s impossible to find the right one for you – in fact, lots of mortgage lenders are potentially available to contract workers…you just need to work with an experienced mortgage advisor in this field who knows who they are and what they are looking for.
Can I get a mortgage if I have just started a new fixed-term contract?
Securing a mortgage with a new fixed-term contract can be tricky, as lenders have varied criteria when it comes to assessing a potential borrower’s situation. Although having employment stability is preferred, some lenders may be able to look at similar experience in the same industry if needed.
Even if you have recently entered a new contract and do not have much of a track record of consistent salary history, you may still be able to qualify for a mortgage depending on your financial situation and other credentials.
Depending on their policies and your specific industry/profession, some lenders may be happy to take into account previous employment as well as your current track record with the new role. Identifying a lender that sees beyond just your most recent contract could make all the difference in getting the right mortgage for your individual case.
Every situation is of course unique and so it is always best to speak directly with an experienced mortgage advisor to determine what options are available for our specific circumstance.
My current fixed-term contract only has a short time left, can I still apply for a mortgage?
As long as you have evidence of your track record and potential for an extension, it could still be possible for you to be able to secure a mortgage even if there is only a short time left on the current contract. Lenders will be looking for your track record in the job role you’re currently in, so having a solid history in your current profession will put you in good stead. Additionally, if the remaining duration of your contract is short but has the potential for extension, this could also be a major benefit
Of course, they’ll also be looking at the likely availability of similar jobs you could move into once this current contract finishes.
So if you have a steady employment history with potential opportunities upon completion of the fixed-term contract, then – with the right advice – you can potentially still apply for a mortgage and make your property ambitions become a reality.
Conclusion
Having a fixed-term contract does not necessarily mean you cannot find a lender and secure a mortgage. The key is to work closely with an experienced and knowledgeable mortgage advisor in this field, as they will be able to help guide you through the process of finding an appropriate lender for your situation and identify the best available options for your individual case.
If you are on a fixed-term contract and looking for the right mortgage solution, look no further than Blue Fish Mortgage Solutions. With my experience and specialist expertise in this area, I can help you find the right lender for your specific situation and provide tailored advice to get you the most competitive available. Contact me today to get started!
What are the key stages of the property buying process in Scotland:
- Speak to mortgage advisor to establish and get advice on what a realistic budget for your individual circumstance might be.
- Mortgage advisor may then progress to obtain an agreement/decision in principle to give you some confidence – not a guarantee – that you could obtain a mortgage. (aka an AIP/DIP)
- Start viewings and then identify property you would like to offer on.
- Instruct solicitor to make offer. (once you’ve done sums and consulted with your mortgage advisor to double check/firm up on figures etc)
- Once offer accepted, we then look to progress the agreement in principle (AIP) to a full mortgage application.
- Legal conveyancing between both solicitors commences.
- Once mortgage offer received, solicitor could be in a position to confirm the legal bargain (aka conclude missives) which would include a definitive date of entry/settlement date.
- For the date of entry, the monies required from you (i.e. deposit) need to be in your solicitors bank account and cleared.
- Solicitor draws down/receives funds from mortgage lender to complete the purchase.
- On the date of entry get keys for your new house.
Hopefully the above information has been useful but if you have any other questions or are ready to start your own property journey now, please fill in the enquiry form and we will get in touch!
This article is intended to be a generic overview and each individual situation will need to be considered carefully, with the final decision being down to the lender.
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